SEP IRA
The 3 out of 5 year rule.
Can you exclude contributions for an individual over age 21 for three years before the can be matched in a SEP IRA?
The 3 out of 5 year rule.
Can you exclude contributions for an individual over age 21 for three years before the can be matched in a SEP IRA?
Permalink Submitted by Alan - IRA critic on Tue, 2021-11-30 15:49
There are no matching contributions in a SEP like there are in a SIMPLE IRA. For a SEP IRA, employees must have worked 3 out of the last 5 years in order to receive employer contributions to the SEP. The employer can choose to make these requirements less restrictive, but cannot make them more restrictive.
Permalink Submitted by Uli Bittenbinder on Tue, 2021-11-30 18:36
I know it’s just an employer contributions. You can make an employee wait 3 years before you are required to contribute for them?
Permalink Submitted by Alan - IRA critic on Tue, 2021-11-30 20:38
Yes, that is correct.